Simple Antidote to 'Seat of The Pants' Management

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Documenting policies and procedures is a practical tool to help any law firm, even a small or virtual one, to assess its operation against objective standards. Law firms are businesses, and every business should have a rationale for its actions.

A firm that's run according to set standards rather than by seat-of-the-pants guesswork avoids internal controversies and approaches client service more efficiently. Administrative standards enable the firm to explore operating efficiencies, gauge its performance relative to its goals, and better assess and reflect value in client services.

These standards should be written, but not overwhelming.

  • Be as specific as possible and write the procedures without using organizational jargon.

  • Use short, direct sentences. Keep it simple to avoid misinterpretation.

  • Present guidelines as bullet points or numbered items to convey a step-by-step process.

    Consider the following examples that can reveal the kinds of challenging personnel situations that a procedures manual can help a firm manage effectively, with minimal aggravation:

  • Unplanned absences - Set clear policies for weather-related absences. Define when and how often employees can be out, whether vacation days must be used, and what kind of notice should be given. It's also a good idea to include in the manual a call-in number or texting alert protocol to inform employees of the firm's status.

  • Employment termination - Every firm should have a severance policy for non-partner lawyers and for staff in the form of written guidelines that describe the procedures for addressing a lack of, or deterioration in, service or performance. Employees should be regularly informed about how they've performed against the standard.

  • Job descriptions - The absence of a comprehensive job description for every position in the office promotes inconsistent performance and threatens objective review. Descriptions should include the specific, significant tasks of each position and the standards for judging if those tasks are accomplished.

  • Financial responsibility - Document all cash-management best practices. That should include procedures for the handling and depositing of all client receipts that are not electronically transmitted, and reconciling all electronic or physical bank statements. Several people should be identified, trained and rotated on those functions.

  • Lateral hiring - Develop a checklist to include mutual agreement on the nature of the ready-made book of business that the firm expects from a lateral hire. Document the status of the new hire's receivables: what comes with the lateral and what stays with the prior firm.

  • Travel - Define when travel is necessary (such as attendance at a deposition or closing, or pitch for new client business) and when it is not (as for a seminar or a retreat). State the documentation needed for all travel expenditures and use ROI to rank such factors in the order of financial preference.

  • Performance benchmarks - Focus on profitability, determined by tracking the gross revenue by client and subtracting the costs associated with serving that client, including how long the firm has to wait for the payments. Track utilization (the percentage of an average workweek that a lawyer bills) and realization (the amount of time actually billed and collected).

The aforementioned procedures should not replace evaluation of qualitative factors in the firm's performance. They do, however, make it easier to run a firm in a businesslike way, which enhances professionalism of the practice of law.

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